Market Overview

Update #1: Saber Partners' CEO Joseph S. Fichera to Speak at Society of Utility Regulatory Financial Analyst Conference


NEW YORK, April 1, 2019 /PRNewswire/ -- Joseph Fichera, CEO of Saber Partners, LLC, will be a featured speaker at the Society of Regulatory Utility and Financial Analysts (SURFA) annual meeting April 4-5, 2019. Utility regulators and executives along with members of the financial and academic communities will discuss "Charting a Course Through Changing Utility Industry Conditions." Mr. Fichera will lead a distinguished panel of experts to discuss "investor-owned utility securitization." Utility securitization is a complex Wall Street financing tool which has been used as an alternative to traditional utility bonds and equity to lower the costs to electricity customers and avoid onerous rate increases.

Mark Cicchetti, President of SURFA and the Bureau Chief of Finance, Tax and Cost Recovery of the Florida Public Service Commission will moderate the discussion. The panel includes Steven C. McNeal, Vice President of Finance at Entergy Corporation and James Hempstead, Managing Director, Global Project & Infrastructure Finance of Moody's Investors Services. 

Different from Traditional Utility Ratemaking

From California to the Carolinas, state legislators are now considering proposals to permit utility securitization for their state's utilities and regulators. The SURFA panel identifies the need for a strong degree of financial and regulatory expertise in the securitization process to ensure that ratepayers benefit from the lowest possible financing costs. Unlike traditional ratemaking, as part of the securitization process, regulators agree to forego future regulatory oversight of a special securitization charge put on all customer electric bills. This enables the structuring and sale of the highest quality bond to investors because investors are now assured that their principal and interest will be repaid without hindrance. However, since the securitized bonds are not direct obligations of the utility and do not impact their interest coverage, the standard ratemaking incentives for a utility to minimize the costs to finance the securitized debt are not present. These factors show the need for strong, independent financial and regulatory expertise throughout the securitization process before any bonds are issued.

California, Colorado, Utah, Missouri, Kansas, South Carolina Consider Securitization

Today, legislators, regulators, consumers and environmental groups are discussing using securitization for new purposes like:

Background on Saber Partners and SURFA

In Utah, the Healthy Environment Alliance of Utah (HEAL Utah) recently hired Saber to advise on developing securitization legislation for Utah. HEAL Utah is an environmental advocate for renewable energy and clean air to protect the public health and environment. In California, the California Community Choice Association (CalCCA) engaged Saber Partners to give testimony on "best practices" before the California Public Utilities Commission on how to use securitization to lower electricity costs for their customers. In January, the National Regulatory Research Institute (NRRI) published an "Insights Report" on securitization written by Mr. Fichera. Since 2000, the Florida, West Virginia, Texas, New Jersey and Wisconsin state regulatory commissions hired Saber Partners to advise them and oversee the raising of $9.02 billion from investors in utility securitization bonds involving 8 utilities in 13 global SEC registered transactions.

Most recently, in 2016, the Florida Public Service Commission chose Saber Partners to assist on a $1.294 billion securitization designed to reduce the costs to consumers of a retired nuclear plant. At a public meeting of the commission, the Office of the People's Counsel, the representative of the state's electricity customers, described Saber Partners' work as "without question instrumental in saving many millions of dollars for customers in current and future costs through their dogged and expert advocacy to achieve the optimum lowest cost for customers at the outset." In 2010, the General Counsel of the West Virginia Public Service Commission stated that Saber's worked in "an efficient manner that protected ratepayer interests and allowed the financing of the project well below the utility's original proposal."

SURFA is a nonprofit corporation, founded in 1977 by financial analysts representing a cross-section of the regulatory process. These financial analysts representing government, the financial community, industry and academia founded the National Society of Rate of Return Analysts (NSRRA).

For further information, email, 212-461-2370.

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SOURCE Saber Partners, LLC

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